BBB warns consumers not to be taken in by marketing blitz

2008-08-05 / Lifestyles

The Better Business Bureau warns consumers not to be taken in by a deceptive extended vehicle warranty marketing campaign that is sweeping the country.

Victims bombarded by an endless stream of postcards, e-mails, letters and calls to home and mobile phones are complaining to BBBs across the country they are receiving such calls even when they are listed on the Do Not Call Registry, a clear violation of federal law.

The Federal Trade Commission also notes it is against the law for telemarketers to contact folks on their mobile phones.

Marketers trying to sell an extended warranty to vehicle owners send mailings that typically catch the recipient's attention with a warning on the front of the correspondence such as "Final Notice: Expiring Auto Warranty."

In fact, these pitches are designed to fool consumers into purchasing unnecessary and questionable warranties, and get them to give up personal information, said Carrie A. Hurt, president and CEO of BBB serving Central and South Central Texas.

Confused consumers say they are driven by fear that their car warranties are expired. Ironically, some say scammers have called them repeatedly to sell an "extended warranty," even though their vehicle's warranty had long expired. The scheme is widespread and its targets include the elderly and even new car owners with valid manufacturer's warranties, said Hurt.

"We find that the telemarketers won't take 'no' for an answer and will call repeatedly, sometimes in the early hours of the morning.

"There are cases where the telemarketers tell people it is unsafe for them to be on the roads because their manufacturer's extended warranty had expired -- even if they never bought an extended warranty in the first place," Hurt added.

Complainants who actually made purchases say they were told the extended warranties cover a wide range of repairs, when in fact a very limited range of services are actually covered.

BBB offers the following tips for dealing with extended warranty offers.

-- Be wary of mailings that appear to come from the vehicle's manufacturer offering extended warranty coverage. Most are not affiliated with the manufacturer or dealership at all.

-- Always ask the telemarketer for the name, telephone number and other information about the company, to allow research to be done before making a decision to purchase.

When considering any type of telephone solicitation, insist on getting a contract in which all terms and conditions are clearly explained before agreeing to sign up or provide credit card or other payment information.

The Federal Trade Commission warns consumers to fully understand terms of coverage, and emphasizes that an extended warranty is not a warranty but a service contract.

Check out companies with the BBB before agreeing to do business with them. For more advice from BBB, go to www.bbb.org.

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